Document Type : Original Article
Authors
1 Shahid Ashrafi Esfahani University
2 shahid ashrafi esfahani university
Abstract
Banks and capital markets play an important role in the functioning of the global financial sector and the global economy. With the development of stock market liquidity, banks' reliance on non-traditional sources of business has increased to compensate for the business losses caused by the traditional intermediation function. The increase in diversification along with the supplements resulting from liquid stock markets can have important effects on the overall stability of the bank. The liquidity of the stock market can influence banks to bring income and diversification of assets and thus increase their stability.
In this study, the impact of stock market liquidity and banking diversity on banking stability in selected countries during the years 2014 to 2022 has been investigated. Multivariate regression models based on combined data have been used to test the research hypotheses.
The results of the research showed that stock market liquidity is effective on bank stability and stock market liquidity has an effect on bank stability. Also, the increase in banking diversity due to the development of stock market liquidity is associated with an increase in bank stability.
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